The movie industry is full of prima donnas, overpaid incompetents and people who talk \n\nendlessly just for the pure pleasure of it. Nothing like your industry, is it?\n\nMore on CIO.com\nInterview: Clayton Christensen on Disruption\n\n2007 CIO 100 Winners: How IT Can Harness the Power of Innovation\n\nBig Ideas 2003: Digital Actors Take Their Virtual Turn in Hollywood\n\nSeven Highly Effective Ways to Kill Innovation (and Seven to Make Sure You Don't)\n\nMust-Have CIO Skills: Innovation, Business-Savvy\n\nHollywood, with its glittery red carpet premieres, may not seem to have much in common with banking, health care or auto manufacturing. But I believe it shares a key trait with every \n\nlarge, well-established industry: \n\nhow it responds to new business models and technologies. \n\nFor more than a century, every time an important innovation knocked on Hollywood's door, the \n\nindustry treated it like a homely auditioner\u2014giving it the cold shoulder and trying to \n\nshow it the door. The movie industry ignored or tried to stave off sound, color, television, \n\nhome video, computer animation, and digital editing and cinematography before realizing that \n\neach revolution would help grow the business, ensure its cultural relevance and expand the creative possibilities.\n\nNew ideas always threaten the status quo. Businesspeople worry how they'll affect today's \n\npredictable revenue streams. Everyone else worries about how they'll affect their standing \n\nin the organization: "Will I be less of an expert when this new tool or technology takes \n\nover?"\n\nWhen innovations arrive in an industry, they split it into three groups: innovators, \n\npreservationists and sideline-sitters. The innovators develop, support and find applications \n\nfor these new ideas. Preservationists seek to preserve the status quo, often battling the \n\ninnovators. The sideline-sitters simply wait to see how things will pan out.\n\nCIOs, in my experience, can find themselves in all these roles. Sometimes a CIO is an \n\nadvocate for a new technology or business model; sometimes she's on the sidelines or \n\ncampaigning to preserve the status quo. The CIO might lead the charge on storage \n\nvirtualization, watch a standards battle play out or explain to sales why storing company \n\ndata on a new Web-based application is a bad idea. \n\nHere are the behind-the-scenes stories of three movies that marked turning points in Hollywood's technological history. Each offers lessons for anyone trying to identify or introduce powerful new innovations.\n\nTake one: Embrace risk.\n\nMost cinephiles remember The Jazz Singer, starring Al Jolson, as the 1927 movie that brought \n\nsynchronized sound to the silver screen. Few recall that others, including Thomas Edison, \n\ntried earlier to link the pictures on screen with a sound track. But the technology wasn't \n\ngood enough\u2014the audio wasn't clear, or it veered out of sync\u2014so most people \n\nconcluded that movies were meant to be silent forever. \n\nBut the Warner brothers were persuaded to explore a new technology developed at AT&T's Bell \n\nLabs. The technology, dubbed Vitaphone, was far from perfect. It relied on easily scratched \n\nrecords (new ones had to be shipped to theaters weekly). The projectionist had to be an \n\nexpert at changing film reels and cueing the record at precisely the right moment. But the \n\ntechnology was just good enough to deliver a thrilling new experience to \n\naudiences\u2014especially when Jolson shouted, "You ain't heard nothing yet, folks!"\n\nThe Vitaphone technology was eventually replaced by something more reliable. But adopting it \n\ncatapulted Warner Bros. into the top tier of movie studios. Net profit jumped from $2 \n\nmillion in 1928 to $17 million in 1929, the year the studio received an award at the first \n\nOscar ceremony for helping to introduce talkies.\n\nThe lesson: Innovation and smart risk-taking go hand in hand. After everyone concluded that \n\naudiences didn't want to watch movies with sound tracks, and that the technology wasn't good \n\nenough, the Warner brothers proved the conventional wisdom wrong. Their willingness to take \n\na risk to innovate enriched their business and helped turn the movies into a truly mass \n\nmedium.\n\nTake two: Pay attention to the customer.\n\nHollywood studios scrambled in the 1950s to respond to the new medium of television, which \n\ndelivered free entertainment to American living rooms. Many of the strategies involved \n\noffering an experience that couldn't be duplicated at home: movies in 3-D, Smell-o-Vision \n\nand Cinerama, which relied on three projectors (and an army of projectionists) to create a \n\npanoramic, immersive image on the screen.\n\nOne technology that stuck was CinemaScope, developed by 20th Century Fox. It succeeded \n\nbecause Fox's president had been a theater owner and understood how acutely cost-conscious \n\nthey were. The technology was cheaper and simpler than its competitors (relying primarily on \n\na special projector lens that expanded the image across a wider screen). Fox offered it in \n\ntwo flavors: one with standard monaural sound, and a pricier version with four-channel \n\nsurround sound. Its first movie to employ the technology was The Robe, a biblical epic \n\nstarring Richard Burton. Within a year of its release, about half of U.S theaters were \n\nequipped to show movies in CinemaScope, and every studio\u2014aside from \n\nParamount\u2014had licensed the technology from Fox. \n\nThe lesson: Innovations like Cinerama may have been more dazzling than CinemaScope, but \n\nsimplicity and low-cost often create an insurmountable market advantage. Understanding the \n\nuser's mind-set is also crucial. \n\nTake three: Build buy-in.\n\nAs he revived his Star Wars franchise, George Lucas decided to explore digitally projecting \n\nStar Wars Episode I: The Phantom Menace, so the movie's 1,000th showing would look as good \n\nas the first. He turned to projectors from Texas Instruments (TI) and Hughes-JVC.\nToday, almost 100 percent of the digital projectors in U.S. movie theaters rely on \n\ntechnology from TI. The Hughes-JVC projector proved temperamental, but TI also had a better \n\nstrategy for winning industry buy-in. It held a series of demos at which directors and \n\ncinematographers watched movie clips shown with prototype projectors and gave feedback. \n\nAfter each demo, TI improved its digital light processor technology and brought it back for \n\nanother round.\n\nThe lesson: Win stakeholder buy-in before implementing something new. Dropping a technology \n\non users without letting them influence how it works is a recipe for disaster.\nToday, Hollywood is trying to assess how the Internet and devices like cell phones and the \n\niPod will affect the business. Many are in full preservationist mode, complaining that \n\ncinematic spectacles don't look very good on a Saltine-sized screen. Getting behind the \n\nright innovations, I'd argue, is what will ensure the industry's continued profitability and \n\nsurvival. And that's not too different from the role a CIO plays in his company.